Trump's Grand Plan to Put American Workers First May Be Backfiring as U.S.-Born Unemployment Rises and Wage Growth Stalls

  Trump's Grand Plan to Put American Workers First May Be Backfiring as U.S.-Born Unemployment Rises and Wage Growth Stalls

## Introduction: The Promise That Was Supposed to Change Everything

During the 2024 campaign, the message was loud and clear. Donald Trump and J.D. Vance promised that mass deportations and a crackdown on immigration would open up jobs for unemployed U.S. citizens. The theory was disarmingly simple: remove immigrant workers, and native-born Americans would fill those open positions.

It was a compelling pitch. Remove the competition, and American workers would finally get the wages and opportunities they deserved. It was the kind of straightforward, common-sense promise that resonated with millions of voters who felt left behind by decades of globalization.

A few years later, the effects of this policy are now visible in the labor market. And the results are not what anyone expected.

The unemployment rate for U.S.-born workers was **4.0%** in 2024 under the Biden administration. It has risen under Trump. With today's jobs report, the three-month average for 2026 shows the U.S.-born unemployment rate is at **4.3%**. The non-seasonally adjusted average for 2026 is even higher at **4.6%**.

Meanwhile, wage growth has slowed to a five-year low of **3.2%**. And inflation-adjusted wages for most workers have risen by just **0.1%** since Trump's return to office in January 2025—meaning workers aren't actually better off in real terms.

The grand plan to put American workers first appears to be backfiring. Here's why.

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## The Immigration Policy: When Removing Workers Doesn't Create Jobs

### The Historic Decline in Migration

The numbers are stark. Net international migration has plummeted from a peak of **2.7 million people in 2024** to an estimated **321,000 by mid-2026**. Some analysts, including the Brookings Institution, project the U.S. could see **negative net migration this year**.

The immigrant labor force is shrinking because of White House policy. And ironically, foreign-born unemployment has actually fallen **below** native-born unemployment. Mark Zandi, chief economist at Moody's, noted that foreign-born unemployment dropped below native-born unemployment in October 2025, based on analysis of a 12-month moving average of seasonally unadjusted data.

This is the opposite of what the administration promised. Removing immigrants from the labor force was supposed to reduce unemployment for American workers. Instead, it has created a situation where the foreign-born workers who remain are more likely to be employed than their native-born counterparts.

### The Complex Reality

The rise in native-born unemployment is more complex than a simple supply-and-demand story. A major driver is that **demand for labor has generally fallen**. When U.S.-born workers make up a larger share of the labor force, this cohort is affected more heavily by changes in demand.

But there's another, more uncomfortable factor at play. The careers and wages immigrant workers have been willing to accept aren't viewed the same way by native workers.

In 2025, foreign-born workers were more likely than native-born workers to be employed in sectors like construction, trucking, natural resources, and health and personal care. These are often physically demanding, lower-paying jobs that many native-born workers simply don't want.

"It just goes to show how difficult many of these jobs are," Zandi told Fortune. "Native-born workers would take them, but it would require much, much higher wages … [and that] would make it uneconomic for the businesses to actually produce whatever it is they're doing".

### The Consumer Effect

There's another dimension to this that's often overlooked. Immigrants are not only workers but also **consumers**, which generates demand and helps the economy grow. When immigrant workers are removed from the economy, the demand they generated disappears too.

Immigrants and U.S.-born workers also **complement** each other in the labor market. For example, when immigrant roofers and framers disappear, there is less work available for native-born electricians and plumbers. When child care workers and cleaners are detained or deported, U.S.-born mothers work fewer hours to cover increased care responsibilities at home.

The theory that removing immigrants would simply open up jobs for American workers has proven to be far too simplistic.

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## The Manufacturing Promise: A "Blue-Collar Bust"

### The Tariff Gamble

President Trump promised that his chaotic, across-the-board tariffs would yield a "manufacturing boom". He claimed foreign companies would "eat" his tariffs and that corporate importers would simply absorb the costs.

Instead, those costs were passed on to consumers, driving up prices for American families and small businesses. Trade policies have cost families an average of **$1,700**, and estimates indicate that American households will end up paying for **95 percent** of the President's tariffs.

### The Jobs That Never Came

The promised manufacturing boom never materialized. Since President Trump's announcement of sweeping tariffs on nearly all trading partners in April 2025, nearly **100,000 manufacturing jobs** have disappeared.

Spending on construction in the manufacturing sector has declined steadily in each month since he took office. In April 2026, private investment in manufacturing construction stood at **$15.2 billion**, a **16 percent decline** from Trump's inauguration. Over the same period, factory employment decreased by **77,000 jobs**.

Even Trump allies are feeling the pinch. Hedge fund billionaire John Paulson, a staunch defender of tariffs, recently announced he will close his brass instrument manufacturing plant in Ohio and move around 150 jobs to China. Whirlpool, another defender of the President's tariffs, has cut nearly 500 U.S. jobs since last year's tariffs.

### The Automation Factor

Even where factories are returning, automation and AI are limiting job gains. The manufacturing sector has been transformed by technology, and the jobs that remain often require different skills than the ones that were lost.

The "golden age" of American manufacturing that Trump promised has become, in the words of critics, a "blue-collar bust". The data simply doesn't support the administration's narrative of a manufacturing renaissance.

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## The Wage Story: Stagnation in a Time of Inflation

### The Numbers Don't Lie

Wage growth has slowed substantially from its 2023-24 pace. The average hourly wage increased **3.5%** over the year from June 2025 to June 2026. That compares to a rate of over 4.0% in 2023 and 2024.

By July 2026, wage growth had slowed to a five-year low of **3.2%**. But inflation was still running at **3.5%** annually. The result? American workers are once again losing buying power.

In April 2026, consumer prices climbed **3.8%** while average wage growth stayed around 3.6%, causing real earnings to turn negative for the first time since 2022.

### The Real Wage Problem

The White House has insisted that the policy has resulted in "significant real wage growth" in key industries like construction, manufacturing, and transportation. But the broader data tells a different story.

Early career workers are facing particularly harsh conditions. Real earnings in 2026 fell **0.7% below 2020 levels** for early career workers, according to Glassdoor. Despite a rebound in nominal earnings, inflationary pressures have wiped out the gains.

The Federal Reserve Bank of New York has found that as of early 2026, American workers received just **54.1% of national income**. That's down from 65% in 1947, when the federal government first began tracking the data.

### The Bigger Picture

The stagnation in wages is part of a broader trend. The administration's assaults on typical workers' bargaining power and leverage—and its support for corporations with significant market power—are pushing income away from low- and moderate-income families and toward the top.

The Economic Policy Institute has reported that real wages declined **0.3% for low-wage workers in 2025**. U.S. workers are taking home a smaller and smaller share of the economic pie.

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## The Human Cost: Real People, Real Struggles

### The Frozen Labor Market

Senator Elizabeth Warren has described the current labor market as effectively "frozen". The combination of Trump's illegal war, chaotic trade policy, and cruel immigration policies has created an environment where workers are struggling to find opportunities.

The administration has stripped collective bargaining rights from over 1 million federal workers in what critics call "the largest act of union busting in American history". It has cut overtime pay for millions of workers and illegally fired half of the commissioners of the Equal Employment Opportunity Commission and the Chair of the National Labor Relations Board.

### The Unemployment Reality

The unemployment rate for U.S.-born workers was **4.7% in February 2026**, compared to 4.4% in February 2025. U.S. workers have not reentered the labor market in response to fewer foreign-born workers.

Even as hundreds of thousands of immigrants left the workforce in 2025, according to Census Bureau data, the unemployment rate for native-born Americans was higher in January 2026 than it was the previous year.

### The Forgotten Workers

There's a particularly cruel irony in all of this. The workers who were supposed to benefit from these policies—the native-born Americans struggling to find good jobs—are the ones who are suffering the most.

The construction, manufacturing, and transportation sectors that were supposed to boom are shedding jobs. The wages that were supposed to rise are stagnating. And the unemployment that was supposed to fall is rising.

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## The Expert Verdict: What Economists Are Saying

### The Zandi Analysis

Mark Zandi, chief economist at Moody's, has offered one of the most comprehensive assessments of the situation. He notes that the immigrant labor force is shrinking because of White House policy. The rise in native-born unemployment is a result of falling labor demand combined with the fact that U.S.-born workers now make up a larger share of the labor force.

But Zandi also highlights the structural mismatch. Immigrant workers have been willing to take on difficult, arduous jobs that native-born workers often reject. "These jobs are typically ones that are very difficult, very arduous," Zandi said.

Native-born workers would take them, but "it would require much, much higher wages". That would make it uneconomic for businesses to operate.

### The EPI Findings

The Economic Policy Institute has been tracking this issue closely. Their analysis shows that claims that mass deportations have helped U.S.-born workers are "simply inconsistent with the data".

Economic research has repeatedly shown that increased immigration enforcement harms everyone in the labor market, including U.S.-born workers. When immigrant workers disappear, the entire economy suffers.

### The CBO Projection

The Congressional Budget Office has projected that inflation will remain high and the labor market will be weaker due to Trump administration policies. The CBO has made clear that the President's tariffs, immigration policy, and the passage of the "Big, Ugly Betrayal" bill will keep inflation high while also slowing employment growth.

### The Zandi Warning

Zandi has warned that these labor market changes could force immigration policy adjustments in the coming years. In the short term, they could bring **stagflationary pressures**: rising prices but sluggish output growth.

The only thing preventing the economy from completely spiraling? Artificial intelligence. That's a fragile lifeline.

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## The Defense: What the Administration Says

### The White House Response

The White House has not remained silent in the face of this criticism. A spokesperson has insisted that the policy has resulted in "significant real wage growth" in key sectors like construction, manufacturing, and transportation.

The administration has pointed to specific industries where wages have increased. They argue that reducing the labor supply has given workers more bargaining power.

### The Counterargument

But the broader data doesn't support this narrative. The New York Fed report shows that wage growth has been slowing across most industries since 2022. The modest gains in some sectors have been more than offset by losses in others.

Critics argue that the administration is cherry-picking data to support a narrative that doesn't hold up to scrutiny. The overall picture is one of stagnation, not progress.

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## The Political Fallout: A Broken Promise

### The Campaign Promise

Trump was clear in his pitch to voters. In 2024, he pledged to bring back the American Dream. Removing immigrants "taking jobs from American workers and driving down their wages" was a key part of the plan.

It was a powerful message. It tapped into the frustrations of millions of Americans who felt left behind. It offered a simple solution to a complex problem.

### The Reality Check

A few years later, the effects of this policy are visible in the labor market. And they're not what anyone expected.

The unemployment rate for U.S.-born workers has risen. Wage growth has stalled. Manufacturing jobs have disappeared. And the promised boom has become a bust.

### The Political Cost

The political cost of this failure is still unfolding. But the frustration among workers who were promised a better deal is palpable. The data contradicts the administration's assertion that immigrants leaving the workforce has resulted in more jobs for those born in the United States.

Congressional Democrats have been vocal in their criticism. Senator Warren and Senator Mark Kelly have pressed Trump officials to explain the disappearance of tens of thousands of manufacturing jobs under the Trump administration.

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## Frequently Asked Questions (FAQs)

### 1. What is the current U.S.-born unemployment rate?

The three-month average for 2026 shows the U.S.-born unemployment rate at **4.3%**. The non-seasonally adjusted average for 2026 is **4.6%**. This represents an increase from 4.0% in 2024.

### 2. How much has immigration declined under the Trump administration?

Net international migration has plummeted from a peak of **2.7 million people in 2024** to an estimated **321,000 by mid-2026**. Some analysts project the U.S. could see **negative net migration** this year.

### 3. Why is foreign-born unemployment lower than native-born unemployment?

The immigrant labor force is shrinking because of White House policy. Foreign-born unemployment is relatively lower as a result. The rise in native-born unemployment is more complex, driven by falling labor demand and a structural mismatch between available jobs and the preferences of native-born workers.

### 4. How many manufacturing jobs have been lost under Trump's tariffs?

Since President Trump's announcement of sweeping tariffs in April 2025, nearly **100,000 manufacturing jobs** have disappeared. Factory employment decreased by **77,000 jobs** over the same period.

### 5. What is happening to wage growth?

Wage growth has slowed to a five-year low of **3.2%**. Inflation-adjusted wages for most workers have risen by just **0.1%** since Trump's return to office in January 2025. Real earnings turned negative for the first time since 2022 in April 2026.

### 6. What do economists say about the immigration policy?

Economists like Mark Zandi of Moody's have noted that the theory behind the policy is being tested: even if native-born Americans face reduced competition for roles, they don't want the jobs anyway. Economic research has repeatedly shown that increased immigration enforcement harms everyone in the labor market, including U.S.-born workers.

### 7. What is the administration's defense?

The White House has insisted that the policy has resulted in "significant real wage growth" in key sectors like construction, manufacturing, and transportation. However, broader data shows that wage growth has been slowing across most industries since 2022.

### 8. What are the risks going forward?

Economists warn that these labor market changes could force immigration policy adjustments in the coming years. In the short term, they could bring stagflationary pressures: rising prices but sluggish output growth. The only thing preventing the economy from completely spiraling is artificial intelligence.

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## Conclusion: When Good Intentions Go Wrong

President Trump's grand plan to put American workers first was built on a simple premise: remove the competition, and American workers will thrive. It was a promise that resonated with millions of voters who felt left behind by decades of globalization.

But the data tells a different story. U.S.-born unemployment has risen. Wage growth has stalled. Manufacturing jobs have disappeared. And the promised boom has become a bust.

The theory that removing immigrants would simply open up jobs for American workers has proven to be far too simplistic. Immigrants are not just competitors for jobs—they are also consumers, entrepreneurs, and complementary workers who help the economy grow.

The structural mismatch between available jobs and the preferences of native-born workers has proven to be a more significant barrier than the presence of immigrant workers. As Mark Zandi observed, native-born workers would take these jobs, but "it would require much, much higher wages". That would make it uneconomic for businesses to operate.

The administration's tariffs have added another layer of damage. Instead of bringing jobs back to America, they have driven up costs for consumers and led to the loss of nearly 100,000 manufacturing jobs.

The result is an economy that is failing the very workers it was supposed to help. Unemployment is rising for U.S.-born workers. Wages are stagnating in real terms. And the cost of essentials like gas, groceries, and housing remains high.

The grand experiment to put American workers first is backfiring. And the workers who were supposed to benefit are the ones paying the price.

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## Disclaimer

*This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. All views expressed are based on the analysis of publicly available information, including government data releases, research reports, and media coverage. Economic conditions, unemployment rates, and policy impacts are subject to change. The views of economists and analysts cited in this article are their own and do not necessarily reflect the views of the author. Before making any financial or career decisions based on the content of this article, please consult with qualified professionals who can evaluate your specific situation. The author is not affiliated with the Economic Policy Institute, Moody's, the Bureau of Labor Statistics, or any other entity mentioned in this article.*